Macro Monitor – April 2024


At its April meeting, the Monetary Council of the central bank continued to cut both the policy rate and the base rate, as it had done in the previous month. As a result, the base rate (and the policy rate) in Hungary is currently at 7.75%, after a 50 basis point cut.

In February, retail sales increased by 1.1% year on year on both a raw and calendar-adjusted basis. Within this, specialised and non-specialised food retailing increased by 2.7%, while non-food retailing decreased by 2.1%. The turnover volume of petrol stations increased by 3.9% compared to the same period last year.

Measured up to March 2024, the value of the monthly SZIGMA CI indicator, which provides a snapshot of the current state of the Hungarian economy, was -0.223. This is a significant strengthening from the previous month’s index value of -0.197. As a result, the growth rate of the Hungarian economy exceeded its historical trend rate, which last occurred in May 2022.

According to the latest projection of the other indicator, SZIGMA LEAD, which is a short-term forward-looking indicator for the future of the Hungarian economy, the growth path is projected to decline sharply but also to be above the trend and then to turn into stagnation by the end of the forecast horizon. Compared to last month’s forecast, the indicator projects a positive outlook.

In March 2024, consumer prices rose by an average of 3.6% on an annual basis.

The wages of public sector workers increased the most in February

In February, the average gross earnings in the national economy were HUF 605,400, up 14.0% compared to the same period last year. The highest average gross earnings were recorded in the business sector, at HUF 611,800. The wage dynamics of the month were strongly influenced by the increase in the minimum wage (15%), the guaranteed minimum wage (10%), which came into force in December, and by government wage increases in the public sector. Median gross earnings were HUF 491,900, 15.3% higher than a year earlier. The increase shows that some companies have not only increased the wages of workers on the minimum wage and guaranteed minimum wage, but have also made significant wage adjustments for other employees to avoid wage compression. Taking benefits into account, average net earnings reached HUF 417,100, 13.8% higher than in February 2023. Real earnings increased by 9.9%, while consumer prices rose by 3.7%.

In 2024, we expect real wages to continue to rise, in line with the upward trend that has started in recent months. Nominal wage increases may be somewhat lower, as price changes seem to be stabilising this year, which reduces the bargaining power of employees somewhat. At the same time, the changing wage structure in companies and sectors due to the increase in the minimum wage and guaranteed minimum wage may also be an important factor in wage negotiations at the beginning of the year.

• The SZIGMA indicator system

The SZIGMA (abbreviation of the Hungarian name “Századvég Index a Gazdasági Momentum Alakulásáról”, in English: Századvég Index of the Development of Economic Momentum) is a simultaneous and preliminary indicator system developed by Századvég for the Hungarian economy.

It is crucial for economic policymakers and analysts to have an accurate picture of the state of the economy, but statistical data are often available with considerable delays. In contrast, the SZIGMA indicators provide information on the economic cycle and the business cycle within 30 days of the reference month, on a monthly basis.

The indicator system consists of two indicators, the SIGMA CI, which summarises the current state of the economy, i.e. information extracted from simultaneous variables, and the SIGMA LEAD, which provides preliminary information on the expected economic trajectory. A positive CI index means that economic growth is above the historical trend, and a negative CI index means that growth is below the historical trend. The SIGMA LEAD indicator provides a short-term forecast for a 9-month period. If the SIGMA LEAD indicator is positive, growth is expected to be above trend in 9 months’ time (i.e. three quarters of a year later), while if it is negative, growth is expected to be below trend in the near future.